Asymmetric information is a key feature of the marriage market. In HIV-endemic settings, HIV risk is an important partner attribute that may influence marriage timing and partner selection. We use a sample of married women in rural Malawi to validate a model of positive assortative matching under asymmetric information. Several correlations support this framework, suggesting that HIV risk contributes to adverse selection in the marriage market in this setting.
I propose a new solution concept, obvious ex post (OXP) equilibrium. This is a formal standard of cognitive simplicity for mechanisms, in settings with interdependent values. Under some standard assumptions, the ascending auction has an efficient OXP equilibrium. I discuss a decision theoretic foundation for OXP mechanisms.
This research paper builds on previous literature and documents general changes in the labor market for Native American women that occurred during the Great Recession using extracts of data from the Current Population Survey Annual Earnings file, known as the Merged Outgoing Rotation Groups (MORG). Wages, unemployment, and other labor market variables for Native American women are contrasted with those of Native American men and white women to determine the relative change in labor market inequality that occurred during the Great Recession.
Who fought the War on Terror? We find that as the wars in Iraq and Afghanistan progressed, there was an increase in the fraction of active-duty Army enlistees who were white or from high-income neighborhoods and that these two groups selected combat occupations more often. Among men, we find an increase in deployment and combat injuries for white and Hispanic soldiers relative to black soldiers and for soldiers from high-income neighborhoods relative to those from low-income neighborhoods. This finding suggests that an all-volunteer force does not compel a disproportionate number of non-white and low socio-economic men to fight America's wars.
Starting in the 1990s, US bank assets grew more concentrated among a few large institutions. We explore the changing role of idiosyncratic volatility as a shaping force of the bank asset power law distribution. Our results reveal that idiosyncratic asset volatilities for bank-holding companies declined since the 1990s. To the extent that firm-specific shocks can have significant macroeconomic consequences, this result implies that even as one obvious source of aggregate risk and contagion--bank asset concentration--has increased, another important source--idiosyncratic volatility--has diminished.
We present the L2Boosting algorithm and two variants, namely post-Boosting and orthogonal Boosting. Building on results in Ye and Spindler (2016), we demonstrate how boosting can be used for estimation and inference of low-dimensional treatment effects. In particular, we consider estimation of a treatment effect in a setting with very many controls and in a setting with very many instruments. We provide simulations and analyze two real applications. We compare the results with Lasso and find that boosting performs quite well. This encourages further use of boosting for estimation of treatment effects in high-dimensional settings.
Motivated by historical examples and ideas from socio-linguistics, in particular the “non-reciprocal power semantic” of Brown and Gilman (1960), we extend evolutionary models of language to incorporate intentional linguistic innovations among conventions that may convey social superiority and inferiority, despite being ambiguous, in the sense of less efficiency in communicating information. We show that egalitarian and unambiguous linguistic conventions can be stochastically stable but also identify conditions under which ambiguous linguistic conventions that are imperfect signals of status differences may be stochastically stable.
During the academic year, 1979-80, over 2,500 students studying first-year economics in nineteen U.K. universities and polytechnics were involved in a research project, the aim of which was to attempt to assess the efficacy of innovative teaching techniques in basic economics. The new techniques included were TIPS (see Allen C. Kelley, 1968), Cases, Programmed Learning, and Macrosimulations. Course packages were constructed, combining innovative and conventional techniques in different proportions. Each course package was designed within the overall objectives of a research design intended to generate a data matrix with sufficient observations in each cell to test the impact of various teaching techniques on different types of students in different institutional settings. Three conventional courses which did not utilize the innovative techniques were included to provide norming data. The common three-hour final examination, which yielded several measures of output, consisted of 20 multiple choice questions to measure knowledge of concepts and simple to intermediate applications, 1 problem-case to measure complex applications and analysis, 1 micro essay and 1 macro essay to measure synthesis and evaluation. There was no choice in the selection of questions to be answered. To ensure that the case and essay marks were consistent across institutions, each paper was regraded by one experienced university lecturer and a sample regraded for a third time to test his consistency. In the three years prior to the experimental year, a total of 26 pilot courses were run in seven institutions to solve logistics problems. Based on the pilot studies, participating institutions adopted one of three broad strategies: (i) the conventional course was scrapped and innovative techniques were substituted for tutorials and essays-complete substitution; (ii) conventional inputs were reduced and innovative techniques were substituted-partial substitution; (iii) innovative techniques were added to existing conventional inputs-add on. Since each teaching technique has a price tag, the strategies produced widely varying course costs, average total cost per student, and marginal cost. An indication of the scope for cost variation can be gained from the fact that the typical conventional first-year course containing 300 students would require 3 lectures and 30 tutorial hours per week (typically there are 10 students per tutorial). In contrast to the use of graduate students in beginning economics tutorials in the United States, tutorials in the United Kingdom are usually shared among all faculty members. A tutorial hour counts as a full contact hour in calculating teaching loads. Thus the opportunity cost of the conventional tutorial system in the United Kingdom could be as high as 7 or 8 upper level courses. Some innovative courses were implemented which scrapped the labor-intensive weekly tutorial system and substituted TIPS, Cases, and one or two hours of class remedial tutorials which students could attend at their own discretion. A comparative institutional cost model was used to derive average and marginal costs. The model included faculty inputs at average U.K. rates, and assumed a 10 hours per week teaching load, and 30 percent of time devoted to research; items such as course as*The Esmee Fairbairn Research Centre, Heriot-Watt University, Edinburgh. Our research was funded by the Department of Education and Science in the U.K., and The Esmee Fairbairn Charitable Trust.
We analyze how children with mental disabilities influence parental portfolio allocation. We find that risky asset holding decreases among households with special needs children. However, conditional on participating in financial markets, households with special needs children invest a larger portion of their wealth in risky assets. As risky asset holding is a key component of wealth building, these findings have important implications for both policy and household wealth inequality.
1) That their equation (2) is logically equivalent to our (hereafter, D-K) sufficiency conditions presented in the 1974 issue of this Review. 2) That the assumption of degree zero homogeneity (in the variables m and p) of the utility function serves completely to characterize the class of illusion-free demand functions derivable from ordinal utility theory. 3) That it is possible to reinstate the usual Slutsky properties by adopting the semi-separable utility function given in their equation (4).